The Small Business Administration (SBA) and the U.S. Treasury Department announced major changes to the Paycheck Protection Program (PPP) Wednesday that could help some REALTORS®.
The revisions allow certain independent contractors to receive automatic forgiveness for 24-week loans and create broader application forms, the National Association of REALTORS® (NAR) reports.
“NAR has been working closely with congressional leaders to loosen forgiveness requirements,” says Shannon McGahn, senior vice president of government affairs for NAR. “Small business owners don’t have the resources to hire lawyers and accountants like large companies, and they shouldn’t be burdened with paperwork and red tape at a time when they’re trying to stay afloat. These new guidelines should go a long way to help.”
Borrowers who received their PPP loans prior to June 5 can choose either an eight- or 24-week period to use their loans, while borrowers who got their loans after June 5 must use a 24-week period. Instead of having to use 75 percent of the loans for payroll expenses, owners are only required to use 60 percent for payroll.
A new “EZ Forgiveness Application” can be used by borrowers who:
- Have no employees or are self-employed,
- Did not cut the hours of employees and employee wages or salaries by more than 25 percent,
- Saw a reduction in business activity because of health directives related to COVID-19 and didn’t lower salaries more than 25 percent.
The deadline to apply for a PPP loan is June 30. The program still has funding available and will close at the end of the month unless Congress acts to extend it.
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